The Golden Circle: How to build a profitable business with a tiny list

The uncomfortable truth is that most people would rather dream about running a $5 million business than actually run a $50,000 business (and grow it from there).

I kind of understand. You start reading emails from some entrepreneur and suddenly the numbers get so big, you become numb to them. 30,000 customers? 800,000 subscribers? A million readers/month? It starts to get overwhelming.

Today, I’ll show you what happens when you start small. Real numbers.

The truth is, you can create a sizable business with a small amount of people.

You can ignore the random wannabes online who want to be famous and brag about hundreds of thousands of social media followers. I have all of that and I can tell you, it doesn’t mean shit. You could take away my Instagram account and Twitter account tomorrow and my business wouldn’t change at all. The only thing that would change is the deafening silence around the internet as I deprived them of my jokes.

Sorry — I got distracted. When I realized I could build a serious business with a small amount of people, it was like lifting a massive weight off my shoulders.

I could stop wasting time chasing random followers, fans, and subscribers. (In fact, I’ve done promotions where we generated 10,000+ new subscribers…and not one of them bought.) I could save massive amounts of time by simply focusing on the core group of people who actually wanted to hear from me. No more plastering the internet with random posts and promotions, hoping that one will hit a nerve and flood your business with new leads. (Btw, here’s the story of one of our biggest guest-posting flops.)

In fact, once I started focusing on just the right people, growing my business got easier, too.

Here’s what can happen when you build a base of raving fans who love you:

That chart shows how we were able to generate almost $9 million from a small group of just 1,000 customers. And they were delighted to pay.

But hey, what if you don’t have 1,000 customers? What if you only have a few hundred?

Introducing the Golden Circle Theory

One of the biggest myths in online business is that “bigger is better.” And as a result, a lot of people think they need tens of thousands or even hundreds of thousands of subscribers before they can start making money.

It’s like thinking you need to be able to dunk like Michael Jordan in order to play basketball. Did I do that sports analogy right?

The Golden Circle Theory describes how the majority of your success and happiness comes from cultivating a small circle of the right people.

You can see this in your social life: It’s fun to have hundreds or thousands of friends on Facebook. But the 10 or 20 friends that you’re close to…those are magical relationships.

As a freelancer/consultant: You don’t need dozens of clients. You can make $100,000+ just by finding the right 3-5. In fact, my students have secured contracts as high as $80,000 from just ONE client.

This isn’t clinical, like about running an 80/20 analysis of the people in your life. It’s about focusing on the people you’re already serving and making them fall in love with you — and falling in love with them. “LOVE,” not “like.”

It’s also about doing things that don’t scale — and pouring your best effort into your first few customers so they fall in love with you.

When you “do things that don’t scale,” growth takes care of itself.

Once you have your Golden Circle in place, it’s like building a house on a solid foundation. The beauty of this is that you only need a small amount of readers, and you can build a serious business.

Now I want to share a few examples of real students who are making the Golden Circle Theory work in their businesses:

$30,000 from 1,401 subscribers— Tiffany Lauriel is a therapist who was already running her own private practice before joining Zero to Launch. She started an online business to teach other therapists how to raise their fees while continuing to help the clients they’re most passionate about serving. With just 1,401 subscribers to her site, heytiffany.com, she’s already generated $30,613.25. And that’s just from her online business. (She’s used Zero to Launch to increase revenues in her private practice, too!)

$5,000 in one launch from 1,800 subscribers — Matteo Manferdini is an iOS consultant. He started an online business to help other developers launch their own apps. With only 1,800 subscribers, Matteo was able to earn $5,000 from one of his very first launches.

$2,000 from 400 subscribers — Another Zero to Launch student, Eric Louis, started an online business showing underground DJs how to make their own music instead of relying on other people’s tracks. With only 400 subscribers so far, he’s already earned $2,000. (You can find his site at itsthedj.com.)

$50,000 from just 14 subscribers — And then there’s Chris Clark, who generated $50,000 worth of consulting offers from a list of just 14 people.

The reason I’m telling you this is that it can be really intimidating to go online and stumble across celebs like Tim Ferriss or Casey Neistat or Zoella.

1.48 million Twitter followers — damn

7.7 million Youtube subscribers — OK that’s insane

11.2 million — WHAT?!?!

I know how it feels…intimidating, overwhelming. How the hell are you ever going to get 7 million subscribers? (Btw, I don’t have that many, so I know exactly how this feels!)

Good news — you don’t need that. You saw the numbers that I showed you. A small number of subscribers can build you a serious business.

I’m writing you this because I’ve been there. I used to believe my business wouldn’t be successful unless I had the same stats as the big gurus I read about online.

Most of us aren’t in business for the fame or validation. Of course if you DO want 1 million subscribers, that’s fine! But you don’t need them. That’s the lesson I want you to take away today.

What we’re really after — being able to make a good living and have an impact doing something we love — well, that’s way more achievable than you’d think.

My advice: Focus on the best customers you have right now (or subscribers if no one’s paid you yet). Make them a part of your Golden Circle. Call them. Ask them what they need help with. Give them white-glove service.

When you do, they’ll fall in love with you and tell everyone else about you.

And here’s the kicker: Once you’ve found those people — your Golden Circle — really, that’s the hard part. Because now you know the ideal customer for your business. Once you do that, it’s easy to grow. Finding your 100, 1,000, or even your 100,000…is much simpler. I’ll show you.

What do you think? I’m sure The Golden Circle Theory applies to way more situations than I’ve described here. What’s another example of when you think you need a lot of something… but in reality a little is all you need?

Ramit Sethi

Andy

I’ve been a subscriber to your list for a while. This post was the first that really stuck and hit a good place with me. I’d love to get more like this, actionable and practical advice. Looking forward to Future articles!

Ramit Sethi

This was awesome, Ramit. I’ve been lurking your stuff for quite a while. I’m currently working on getting debt free, and then I’m going to get ZTL as soon as that happens.

This post really hammers home the idea that you need to focus on the basics (I think you emailed me about that the other day.. hmmm…) and that its the simple, repetative, working steps that make the dream happen.

Thanks for keeping my feet on the ground, and for helping me get over my shiny object syndrome.

Hello Ramit, thanks. A powerful article as usual. I have a folder where I store all your powerful articles. As a matter of fact, I store all powerful articles in my laptop in a folder named Ramit Sethi. That shows how seriously I take your articles and ideas. I read your interview with Tim Ferriss in The Tools of Titans so you’re a BIG BOY. Anybody making over $5mm, talk less of $7mm, is indeed super big. For your information, $7mm is N2.55billion in my currency. Meanwhile I’m still struggling to make my first $1,000 online.

I first read about The Golden Circle in Simon Sinek’s Start With Why and first read about 1,000 true fans from Kevin Kelly. So what you’re saying is that the 1,000 true fans are indeed your Golden Circle. The implication of your article is that one does not really need 1,000 fans, that you can make it BIG even with 100 true fans in your Golden Circle. This is a fantastic idea.

Ramit this is something that confused me when I started reading your articles or when I came across your blog. I’m intrigued and I’d like to know how you’re doing this. You write under two monikers or using two platforms, IWT and GrowthLab. So, how do you combine IWT (I Will Teach You) and GrowthLab, which can be confusing sometimes? As a beginner (as I told you earlier, I’m yet to make my first $1,000 online), which is the best platform for me, IWT or GrowthLab?

As always, thanks for reminding us to crawl before we walk. It reminded me to celebrate the first 50k in your business,
even if you really want to be at 100k eventually. For your event next week, I’m leaning towards either the topic about increasing the number of customers OR the topic about increasing the value of the customers you have. Here’s a question I do have: How should people in the early stages of their business know which of those things to focus on?

KidRobot is a great example of this! With an average estimated sale of $30 (based on my own research into their traffic, products, income, etc. (all public stuff BTW)), they’ve made up to 15 million annual from less than 2% of their total website traffic.

Shane antisdel

Ramit, THIS is yet another reason why you’re the best of the online business consulting universe.

In addition to your posts with actual concrete steps that people can take to start building their own business, you also make it a point to encourage us to see the tiny wins (and even the losses – “we spent 3 weeks on a guest post and got 13 sign-ups!”) as necessary to the journey leading to ultimate success.

Rome wasn’t built in a day, a journey of a thousand miles begins with a step, and everyone has set backs. But you push us to keep going. Thanks.

Ramit Sethi

joseph brain

The takeaway would be to lazer focus on quality over quantity. The dilemma would be identifying what that avatar would be that is willing and able to buy and large enough and willing to listen to my hook/content. Because I’m young and grasping, I feel like I can’t help but to throw stuff at the wall, which attracts a broader audience until I can find my niche. I’m thinking Asian American Millennials who want to stop procrastinating.